Sponsor
Sean Casten
Representative · D-IL
Representative · D-IL
The bill strengthens recognition and transparency for home energy features—potentially boosting value and underwriting certainty for energy-efficient homes—while imposing new compliance and training costs and creating a risk of appraisal variability that may raise costs or uncertainty for borrowers.
Homeowners of energy-efficient homes will more reliably see energy features reflected in appraisals and face less underwriting uncertainty because creditors must accept appraised values developed with energy-report information.
Prospective borrowers and homeowners can obtain energy reports at no cost on request and will be notified of that right in loan disclosures, increasing transparency and lowering barriers to documenting energy improvements.
Appraisers and the appraisal industry will receive clearer standards and required training on how to consider energy features, improving consistency in how energy-related attributes are evaluated.
Lenders and creditors will incur compliance, system-update, and training costs (including providing free report copies) that are likely to be passed on to consumers via higher loan pricing or reduced mortgage product availability, and could impose costs on taxpayers.
Appraisers face additional mandatory training (e.g., a 7+ hour course) and new appraisal requirements, which may increase appraisal fees and turnaround times for borrowers.
If energy reports are uneven in quality, inconsistent consideration of energy information could produce variable appraisals and valuation uncertainty for borrowers.
Based on analysis of 2 sections of legislative text.
Requires mortgage creditors and appraisers to accept and consider property energy reports, and mandates a borrower disclosure aligned with Regulation Z.
Official title: To provide for accurate energy appraisals in connection with residential mortgage loans, and for other purposes.
Introduced March 27, 2025 by Sean Casten · Last progress March 27, 2025
Requires mortgage creditors and appraisers to consider and incorporate homeowner energy reports and information into loan appraisal and underwriting, and to give borrowers a written disclosure telling them they can provide an energy report and that an appraiser will consider it. Agencies must adopt rules aligning the disclosure timing with existing Regulation Z disclosures and require that, with borrower consent, creditors provide the property's energy report to the assigned appraiser; appraisers must consider specified energy and renewable features when developing an appraisal. The rulemaking requirement takes effect March 1, 2026.